Daily CPFL was negative by 1.7 to 1 Tuesday with Daily CPFL Ratio also “Neutral” to “Oversold” (.85). Indicator is nowhere near major resistance made week of February 25, 2011.

Cumulative Volume (CV) in both S&P 500 and S&P Emini remains weaker than index pricing on both Daily and Weekly trends.

Market Overview – What We Think:

Tuesday’s sharp selling in NASDAQ Composite index may have paved way for reversal of Minor Cycle to negative in all of other major indexes. Both S&P 500 and Dow 30 are also on verge of short-term reversals relative to lower edges of 10-Day Price Channels.

If such follow through selling develops, it could make case for optimism on intermediate uptrend in effect since June much more difficult since something more negative could be lurking on horizon.

Nothing but strength in S&P back above September 14 intraday high (1474.51) would re-assert intermediate-term advance begun at June 4 low (1266.74).

Indicators such as Daily Most Actives Advance/Decline Line (MAAD) continue to suggest market has gotten ahead of itself.

In background it’s important to keep in mind fact market is entering time of year that has proven to be historically vulnerable -- think 1929, 1987, and 2007.

Index

Daily / Weekly / Monthly Stops

Weekly

Monthly

10/8

10/9

10/10

10/11

10/12

10/12

10/31

S&P 500 Index

SELL1441.45

SELL1440.22

SELL1439.85

SELL1441.42

SELL1444.02

SELL1381.36

SELL1269.05

Dow Jones Industrials

SELL13447.58

SELL13438.41

SELL13433.52

SELL13440.95

SELL13461.90

SELL12922.28

SELL12141.09

NASDAQ Composite

BUY3154.74

BUY3148.72

BUY3145.51

BUY3145.17

BUY3148.64

SELL2981.27

SELL2716.62

Value Line Index

BUY3094.98

BUY3089.77

BUY3086.35

BUY3085.97

BUY3091.64

SELL2903.25

SELL2723.41

Note: Stop levels, a function of the extant trend, are based on the trailing moving average price channels for the Highs or the Lows of an index. Whether or not a specific index is suggesting a “Buy” or Sell” is determined by whether or not index prices are above or below the current channel Stop levels. Stop levels should only be used as an entry or exit guide and in conjunction with other market entry and exit strategies.